GAIL says LNG supply from Gazprom will start from May

Reuters are reporting that India’s state-owned gas supplier and developer GAIL Ltd plans to buy 0.5 million t or eight cargoes of LNG from Russia’s Gazprom in 2018/19, its chairman and managing director B.C. Tripathi said.

“The cargoes will start coming from May,” Tripathi said.

GAIL renegotiated the terms of a long-term 2.5 million tpy LNG purchase deal with Russia’s Gazprom in January.

This was the third such renegotiation by India with LNG suppliers to make the imported fuel more affordable, using its position as one of the world’s biggest energy consumers to strike better bargains for its companies.

India has also renegotiated long-term LNG deals with Qatar’s RasGas and Exxon Mobil Corp as spot prices declined substantially amid a supply glut that turned trading of the seaborne gas into a buyers’ market.

GAIL is planning to get as much as 5 million t of LNG from the United States as well, equivalent to approximately 80 cargoes throughout the fiscal year, Tripathi said.

He said half of the US LNG cargoes could be swapped for shipments from other suppliers, depending on available terms.

“Swapping is a continuous process and we are doing it regularly. We have swapped three so far in this year,” he said, although he added that GAIL did not expect to swap any of the Gazprom cargoes this year.

The much-delayed Kochi-Mangalore natural gas pipeline, which can open up a substantial latent demand in South India, will be ready by November, he said.

The pipeline will connect Petronet LNG’s 5 million tpy regasification terminal at Kochi in southern India to demand centers in and around Mangalore, including a refinery run by Bharat Petroleum Corp Ltd and Managalore Refinery and Petrochemicals Ltd and fertilizer plants.

GAIL is also working on implementing a national gas grid that is aimed at connecting the under-served eastern part of the country to the rest of the nation.

“We are trying to implement a large portion of the gas grid by 2022/23. The 4000 km which GAIL is implementing today should be ready by December 2022,” Tripathi said.